Dunleavy talks pandemic, big dividends and resource development in virtual State of the State address

A white man in a black susit and red tie speaks into  camer
Screenshot from Gov. Mike Dunleavy’s Jan. 28 2021 State of the State address (Screenshot from KTOO)

Gov. Mike Dunleavy explained his approach to the COVID-19 pandemic and called for large Permanent Fund dividend payments and developing Alaska’s resources in his third State of the State address on Thursday.

Dunleavy thanked state health leaders, public servants and “frontline heroes” for their work on the pandemic. He also recalled his years living in rural Alaska.

“I would be lying if I said the tragedy of 1918 didn’t weigh deeply on me,” Dunleavy said of the worldwide flu that devastated Alaska. “I lived in those villages and was forever changed by the stories of elders who survived. These stories compelled me to ensure there would be no repeat of 1918 on my watch.”

The conditions around the speech may be the most unusual in the state’s history. Dunleavy spoke by video through a livestream rather than in the traditional venue of a joint session in the Capitol. The governor’s office cited the complications from COVID-19 for the changed format. In addition, The Alaska House hasn’t chosen a temporary speaker and couldn’t invite the governor, as is customary.

Dunleavy pitched his plan to pay roughly $5,000 in dividends this year as a way to help Alaska’s economy. Roughly $2,000 would pay for the difference between last year’s dividend and what it would have been under the formula in state law, and roughly $3,000 would be for this year’s dividend.

“If we cannot find it within ourselves to put to use less than one year’s worth of fund growth, so that the thousands of Alaskans and businesses impacted can get back on their feet, then we have to question our priorities as leaders in Alaska during its time of need,” he said.

And Dunleavy talked about how the state was nearly cut off from shipping at a point early in the pandemic, and said his administration would plan to be more self-reliant in food, energy and other areas.

He also called for developing the state’s natural resources.

“When our history is written, will it be that we forced our children to look beyond Alaska’s shores for the American Dream, that we stood by until Alaska was nothing more than a handful of holdouts fighting to be the last park ranger?” he said. “Or will it be said that this was our finest hour, that we ignored the calls of divisiveness and pulled together like Alaskans always have?”

Dunleavy called for introducing gaming in Alaska; $4 million to defend what he called the state’s sovereignty against “an overreaching federal government”; and increased funding for homeschooling.

In the speech, he didn’t put forward any large taxes to pay for the dividends and other plans. That’s consistent with his previous addresses to the state.

This year’s State of the State by the Republican governor was met with praise by many Republican lawmakers, and skepticism from at least some Democrats and independents.

Senate President Peter Micciche, a Soldotna Republican, praised the governor’s approach to the economy. He was among those who talked about how Dunleavy’s plans fit into the long-term gap between what the state spends and what it raises.

While Dunleavy has opposed large revenue measures in the past, Micciche said the governor may be open to new, broad-based tax. Micciche said Alaskans who supported larger Permanent Fund dividends feel that PFDs have been cut without others being asked to pay more.

“It’s the fairness issue, I think, is giving us the biggest political amount of resistance,” Micciche said. “So I think if we honestly discuss that with the governor, who I think now is talking about broad-based options — I mean, he’d like to see it go to a vote of the people — whether or not that occurs is yet to be seen, but at least he’s willing to have those discussions.”

Dillingham Rep. Bryce Edgmon, a Democratic-nominated independent, said the speech didn’t include a plan that would balance the state’s budget without spending down the Alaska Permanent Fund’s earnings.

“The dividing issue down here in Juneau right now is the fiscal plan and what to do in an environment where we’ve exhausted our savings accounts, and we have to turn to other sources in order to make ends meet and provide a sustainable dividend, and I heard nothing about that tonight,” he said.

Anchorage Democratic Sen. Tom Begich also expressed disappointment at how the address relates to the state’s budget problems.

“The only real revenue measure he talked about was a gambling measure. And I think we’ve gambled on our future more than enough,” he said. “What we need to do is have a real plan.”

Edgmon and Begich both praised the parts of the address that highlighted the state’s COVID-19 response.

In a news conference afterward, 14 House Republicans took turns uniformly praising the governor’s speech..

Wasilla Republican Rep. Cathy Tilton likes Dunleavy’s plan to lower the state’s constitutional limit on spending.

“I enjoyed the optimism that the governor put forward for how he sees our state moving forward, and our economy,” she said.

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